India's securitisation market may grow to ₹2.7 lakh crore in FY27: ICRA lists key growth drivers

India's securitisation market is expected to grow to ₹2.6 lakh crore-₹2.7 lakh crore in FY2026-27, driven primarily by non-banking financial companies (NBFCs), according to ratings agency ICRA.

The projected growth comes after securitisation volumes stood at around ₹2.5 lakh crore in FY2025-26, with NBFCs expected to remain the key contributors to market activity this financial year.

The market has started FY2026-27 on a strong note, with securitisation volumes estimated at around ₹61,000 crore in the April-June quarter, up about 20% from a year earlier. Nearly all of these volumes were originated by non-bank lenders, continuing the trend seen since last financial year as banks reduced their securitisation activity.

ICRA said the growth came despite some of the larger NBFCs reducing their sell-down volumes, indicating that several new and smaller non-bank lenders are increasingly using securitisation as a funding tool.

"The first quarter of 2026-27 has witnessed healthy securitisation volumes, reflecting good demand and continued reliance of originators on securitisation as a liquidity and funding tool," said Sachin Joglekar, Vice President and Co-Group Head, Structured Finance Ratings at ICRA.

He added that while gold loan securitisation emerged as the largest asset class during the quarter, the microfinance sector also showed signs of operational stability, with improving disbursements and collection efficiencies helping revive investor interest.

Gold loans accounted for around 28% of securitised volumes in the first quarter, followed by vehicle loans at 25%. Mortgage loans and microfinance each contributed about 13% of the overall volumes.

ICRA also noted moderation in the securitisation of MSME and business loans, reflecting investor caution amid headwinds in the segment.

In terms of transaction structures, direct assignments (DA) accounted for 53% of securitisation volumes during the quarter, overtaking pass-through certificates (PTCs), which made up the remaining 47%. Gold loan and mortgage portfolios were primarily securitised through the DA route, while vehicle and microfinance loans were largely securitised through PTCs.